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- [00:00]
A
Welcome back. How are you doing?
- [00:02]
B
Great to be here, guys. Great to be here.
- [00:04]
A
Fantastic.
- [00:05]
C
Back to back with Kyle.
- [00:07]
A
Yeah. Yeah. He laid out one of the greatest SpaceX bull cases. We're going to throw it to you to try and one up him. He said, whoever controls space controls the world. And for that reason, you got to own SpaceX. I liked it. But take us a level deeper. What are you thinking about in the SpaceX IPO in the lead up, what are you watching for? What unanswered questions are there? What to do you think is misunderstood, maybe that more people should be aware of?
- [00:30]
B
I mean, come on, guys, we didn't even have any foreplay. You already tried to be down SpaceX IPO. I mean, first. I haven't seen you guys. Did you sell this thing? I think we're working for you now.
- [00:43]
A
I think we're working for you now.
- [00:45]
B
Did you guys get shares in OpenAI when you sold this thing?
- [00:49]
C
Yeah.
- [00:50]
B
So we're all on the same team. Yeah. How much money did you make?
- [00:56]
C
Yeah, that's.
- [00:57]
B
I mean, we got. We got to turn the tables a little bit Anyway. Let's talk SpaceX.
- [01:02]
C
Well, well, well, maybe before that we can rewind a little bit, because I do remember the last time we were hanging out in person. It was at Katzenberg's event. Right. You were basically. It was kind of this interesting moment because in some ways we were going through a mini correction, Right? Like chatbots, you know, grew incredibly quickly, agents were just starting to work, and it's been interesting to see how the market did go through this correction in Q4, but then realize, hey, whoa, agents are a thing. And you had pretty much perfectly called that in the conversation that. That we were having, which, yeah, in some ways it's just been. It's been such a wild year for so many reasons, but I feel like you had a. Somewhat. Somewhat of a crystal ball back then.
- [01:49]
B
Yeah, well, I mean, thank you. And I recall that conversation. And the truth of the matter is we've gone through several mini corrections over the course of the last two and a half years. Right. There's been a wall of worry. I mean, on my podcast with Bill, Bill Gurley, you know, we debated this. You know, Bill was saying, will the revenue show up? Will there be gross margins? Will there be roi? We're overbuilding, Are we? You know, every supply constraint turns into a glut. And we saw all that wall of worry last year. I mean, I think for me, the turning point was when. When we hit inference, time, reasoning, and we really had this whole other vector of scaling intelligence. And I remember having Jensen on the podcast, he said, Brad, inference isn't going to 100x, not go 1000x, it's going to 1 billionx because agents are going to be talking to agents, right? And so I got very pilled and then what we saw Opus 4.6 in the beginning of December. It was clear that we had crossed a threshold of intelligence that offered a level of utility that was fundamentally different. And if you were paying attention early in December, you could see that coming. But we started the year with the market very skeptical as to whether or not revenues would show up. And let me tell you this, had Anthropic not delivered its revenues that it's delivered this year, I think the stock market would be down 10 or 15%. I think it's that important to the entire narrative because the fact of the matter is OpenAI has not blown away their numbers. Google has not blown away their numbers. Like numbers have been good, but the fundamental driver of, of of outperformance in terms of offtake of AI revenues has been Anthropic, which is the fastest growing company in the history of capitalism. So that buoyed the entire AI segment. And it was when they started posting those numbers and then they said on top of that we're doing it at high gross margins in a way that in Q2 may in fact actually lead to free catch some positive free cash flow. The market really ascended. Remember two months ago, the market was basically down on the year. And a lot of these returns, we just had two of the biggest months in the history of Altimeter's public funds. That's 18 years. I mean we're going back a long time, but that's, you know, listen, I think we picked some pretty good stocks, memory logic, etc. But I also think it's just a function of, of the market delivered. These companies delivered. You saw Dell's. I mean, listen, Michael Dell, one of my best buds, and you watch the act, you know that he's delivering with Dell, they just had a server. Revenues up 750% year over year, went from a $1 billion business to a $16 billion business. This stuff is real. But in order for it to stay real, we have to continue to see usage by consumers that they're willing to pay for and growth in the enterprise, small, medium and large that they're willing to pay for and growth in the sovereign domain. I think it will occur, but oftentimes, you know, there'll be some pockets along the way. Here where, you know, where revenues won't be as strong as people think, we'll have some pullbacks. We could have 10 to 20% pullbacks in the semiconductor stock as just like run of the mill consolidation. Yeah, yeah, right, Run of the mill consolidation. I mean, Micron has gone from a couple hundred bucks to 1,000 bucks. Dell this time last year was I think 80 or $90. It's now at $400. These are seismic moves. Yeah, right. And so, yeah, fortunately we were pretty bullish when other people were skeptical.
- [05:16]
A
Yeah. But yeah, it feels like, it feels like there's, there's like this natural reaction. Any time there's good news, someone has to dig up something that's like a little bit bearish. Right now we're seeing, you know, incredible anthropic revenues and then there's questions about ROI on token maxing and how much is going on there. How are you processing that? Thinking that we'll see CEOs and management teams on the next earnings cycle sort of start to dig into those numbers, or is it just the honor I
- [05:44]
C
better look at AI psychosis.
- [05:45]
A
Yeah, well, that's the most extreme version. The other one is, yeah, we actually did spend half a billion dollars in a month and you know, a quarter billion was super effective. So that's what we're doubling down on in the coming quarter. But how do you think that shakes out?
- [05:58]
B
Well, I mean, if I, if I size up the debate in Silicon Valley. Yeah, right. There are the bears who've been bearish on AI for, let's call it a while.
- [06:06]
C
And anything that comes out, anything that comes out is actually just right.
- [06:12]
B
And so now they're saying, oh, all this AI revenue is bullshit. First they were saying it won't show up at all.
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A
Yeah.
- [06:18]
B
And then it showed up. And then they're saying, oh, it's all bullshit because it's all token maxing and there's no roi. So that's one side.
- [06:24]
A
Yep.
- [06:24]
B
On the other side of the people who are super AI pilled and they're like, oh no, this is perfectly, you know, Pareto optimal. Everybody's spending the exact right amount of money on tokens, which we also know is not true. And the truth buys in the center. Okay. When you have millions of independent actors all making self rationalizing decisions like altimeter on buying tokens. Right. I don't like, I don't like to waste money. Yeah, yeah, I'm spending money because I'm getting a return. Now will we experiment with some things that don't provide A return, of course. I actually sent you guys a slide on this. I think it's pretty fascinating. I don't know if your team can pull up, but this is independent research that we did on this question of token maxing. And what we did is we went to 300 enterprises, right? And we just asked them, are you starting to optimize your spend? And if so, how much do you expect that you're going to spend year over year over the course of the next 12 months? And if you leave that chart up, what you will see, guys, is that in the first category, these are all people who are actively optimizing, but they still expect to grow revenues at over 50% over the next 12 months. The second category are people who are planning to optimize. And even if they're planning to optimize, they say they're going to grow revenue at 90% and so on. So here's my point on this, right? And this is across 300 firms who use a multiple of AI solutions, this is what they expect of their AI, you know, API, token usage.
- [07:53]
A
Yeah.
- [07:54]
B
So what do we, what does that tell us? It tells us that of course people optimize along the way, but we are so early in the adoption curve, right? They're barely using coding today. They're just getting on the coding train and they haven't really even started on using AI for knowledge work more generally. So we're low in the use the penetration of coding as a use case. We're almost nowhere in the penetration of knowledge work more generally as a use case. And then remember this, there are very few enterprises globally that are even using AI. So we are really early in the curve of the people who are actually using AI. So I'm somewhere in the middle. Of course I believe that optimization will continue, but my hunch is that Anthropic and OpenAI, these companies will continue to grow right through the optimization because the growth curve on penetration of both enterprise and use case is so steep. But, you know, we'll see.
- [08:50]
A
Yeah. Is this a, is this a zero sum market where every dollar spent on tokens comes out of a SaaS company? How are you reflecting on the SaaS apocalypse? Because we all saw what happened in the market, but there's been some really good news lately. How have you processed that?
- [09:08]
B
Well, I popped on CNBC for a second yesterday and was talking about Snowflake as an example and the stock was up what, 35% yesterday. Now of course, just to be fair, it's only up 10% for the year. Compared to a company like micron, up 200% for the year. A company like ARM, up 200% for the year. But they did bounce back. And what, what I think we're starting to see is the bifurcation. There are companies that are in the token flow. So all these software companies, we just lump together. Right. We treat them as though they're all equal. But there are certain software companies, Databricks, Snowflake and Clickhouse, all of which we're investors in, which very clear to me, they're in the token flow. As you consume more tokens, the amount of your database queries goes up. I see it at altimeter. Right. In fact, our database queries are growing faster than our token usage, to give you a sense.
- [09:56]
A
Yeah.
- [09:56]
B
And this is, I think so now they've proven they're in the token flow. So they're starting to get some love from an AI multiple perspective that's very different than a company, I think, like, like Salesforce and I love Marc Benioff and you know, if anybody can, you know, get in the token flow, it'll be him. But the reality is the front facing solutions that they offer are more competitive with the models than something like Snowflake. Snowflake's the enabler of the models, whereas I think that Salesforce competes a bit more. So it's going to be more challenging. But I also, I've heard so much about the SAS apocalypse. And listen, I did a POD with Satya, I don't know, 18 months ago where he caused a stir by saying software is a thin user interface on top of a CRUD database. And Benioff and everybody freaked out. They're like, what are you saying? It's way more than that. Right. And Bill and I did a pod. Is software dead? So it's not like this is new. But then everybody started freaking out in December, all these multiples reset. But the question is, what did they reset to? Okay, and this is what I want to focus on here. So if you show this slide that I prepared for you, fine esteemed gentlemen. You know what this slide shows is that the multiple correction just took software from a place where they were way more expensive than the market multiple and brought them into the category of the market multiple. Right. So now they're trading at about 22, 23 times real SBC included, Gap earnings. That's about where the market is trading. So now just follow me on this. Software is trading. Mostly software names are trading at a higher multiple than in video. Right. Nvidia is trading about 13 times earning for 70% growth for the thing that is the most essential thing in AI. And they're at twice the multiple. So, like, when I hear everybody crying that, hey, these multiples aren't fair, it looks to me like the multiples reset from an above market multiple where everybody thought the software revenues and earnings were impenetrable to. Now they're saying, well, I don't know, some of this, maybe three, four, five years out will be replaced. So we're going to raise the discount rate, we're going to lower the multiple. They've only lowered it to the market multiple. Let me just suggest that there's a possibility these trade well below the market multiple. Sure, right. I'm not, I'm not wishing for that, but I'm just saying there's a distribution of potential outcomes here. If you get on the AI train, if you get in the token flow, you're going to get above market multiple. If you don't, if you slow down and it looks like every time that computational intelligence improves your business gets worse, then I promise you they will trade below the market multiple and there's more room to the downside. So for us as investors, you know, Warren Buffett has this, you know, this old metaphor. You know, there's the easy basket, there's the hard basket, or the yes basket, the no basket, the too hard basket. For me, software today is generally in the too hard basket with.
- [12:58]
C
Yes, it's notable because you've been saying that, I think, for months now, and there's a lot of people now that there's been a stabilization that say, like, oh, I'm smart enough, I can, I can, I can outsmart the market here. And like you're saying, even with where multiples are now, you still could be catching a falling knife. I wanted to ask you about the potential data center moratorium and how, you know, the likelihood of something like that, in your view, how that would, if you have less capacity coming online, that would obviously be bad for, you know, chip companies, various companies in the hardware supply chain. But it could be great for people that are actually have, you know, basically like have tokens to sell because they would potentially get more pricing power. How do you think it's bad for everybody.
- [13:54]
B
Bad for everybody. But most importantly, it would be horrific for America.
- [13:57]
A
Yeah.
- [13:58]
B
And lest we be overconfident in Silicon Valley, let's remember the activists. A small group of activists shut down supersonic technology, and a small group of activists shut down all nuclear clean energy in this country. Okay. We have 100 fission reactors being built in China. We have one in the United States. It's a disaster that happened. And so we can't take for granted that the kooks who are calling for data center moratoriums. Right. Which just think about this for a second. All of our GDP growth is coming from the fact that we are building data centers and driving AI and driving productivity improvements in the economy. A data center moratorium would thrust us straight into a recession and high unemployment. Secondly, it would cede the entire global game to China. Like overnight we would lose to China in the global air race, which is not just about AI, but it's about economic security, it's about jobs and it's about national security. So it literally is insane that we would do this. I can't even believe there are people talking about it. However, why are they talking about it? Because people are concerned. Local communities are concerned. I just got back from celebrating my mother's 90th in rural Indiana, you know, over the Memorial Day weekend. And what I'll tell you.
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A
Happy birthday.
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B
Happy birthday, boys. She's incredible. She is so incredible. But you think about a place like Mishawaka, Indiana.
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A
Yeah.
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B
Where, you know, they're building a data center. I mean folks here, they, they're worried about their jobs, they're worried about their kids having jobs. And then they're told by these crazy activists who show up in their town they're not going to have any water and their electricity bills are going to go up. So can we blame these people for being a little agitated about what's going on? So I'm actually working on an initiative I'm not prepared to announce today, but with like everybody in the value chain, all of the cloud companies, all of the Nvidia's and AMD's and you know, and off takers, etc. And the white House, that would deliver a very tangible and profound dividend to the communities that we're building.
- [16:03]
C
There we go. And I think, I think it's, there's a very elegant solution there. You're the guy to do it. You're the hero that American capitalism deserves. You got Trump accounts done. I feel like this a good, good next act for you.
- [16:17]
B
Well, I'm in the mix. I'm happy to do my part. There are extraordinary people around the table. But here's the thing. We have to build the socio political bridge for the next three years, Right. In three years it's going to be obvious, I think the abundance and the benefits that AI is driving for us as Consumers, everybody's going to have their own personal assistant in their pocket, right. For next to nothing. Think about that. Can do your calendar, can order your food, can, you know, get you a new black T shirt, send mom a birthday present, all the things. And every enterprise is going to have things that up level us all as humans. So I am firmly, just like, you know, John Maynard Keynes was at the start of the industrial revolution, I am firmly in camp optimism about technological progress. But I'm also not head in the sand about the disruption and the concern people have for the next three years. So we have to give them tangible benefits that get us over that bridge. I think we're going to do it. I'm feeling pretty optimistic about it. But you're right to bring it up and you're right to be concerned about it. We cannot take it for granted.
- [17:18]
C
Yeah, the. I mean, this just goes back. I think it's entirely fair that individuals, you know, if you say, I'm going to put an AI factory in your backyard, okay, is going to create jobs briefly and then, you know, some, some, some maintenance. I think it's totally fair for people to not want it in their backyard because there's some. They perceive some risk and there's no direct benefits because they can just get AI anywhere. Right. It doesn't matter.
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B
We're going to.
- [17:46]
C
But there's a solution.
- [17:48]
B
Yep.
- [17:49]
C
How are you thinking about adoption curves? It feels like part of the reason that we've had these kind of like rolling corrections is that technology gets adopted really quickly. People assume that it's just a straight line forever, but then there's a new capability, a new technology, and it feels like stuff is just breaking through, like instantly. Where have you. Like, are you adopting new frameworks internally to try to understand how quickly new products can get to market? Obviously, enterprise is different, but it feels like the line between consumer and enterprise, at least in coding, has never been more blurred.
- [18:32]
B
For sure. I mean, listen, I think about when I got into the game, guys, 1999, 2000, and we had about 35 million people connected to broadband Internet. Right. We all saw what Amazon was going to be. But where we got over our skis is we thought it would come a lot faster. And we forgot that there were only 35 million people connected to broadband Internet. Today we have 4 billion. 3, 4 billion. Like the rate of diffusion and the magnitude of diffusion is radically, radically different. And think about this. We have a natural constraint on how fast we can go because we only have so many memory wafers in the world. We only have so many logic wafers in the world. We only have so much powered shell in the world. That means we can only produce so many tokens. Okay. And it's almost as though in 1999, 2000, we could only lay so much fiber. I've said this a thousand times. When we were putting down the fiber in 2000, we called it dark fiber for a reason. There was nobody using it, and we knew there was nobody using it when we put it in the ground. There's not a dark GPU in the world today. Yeah, okay. There's not a dark token in the world today. So I think it's a very different thing. I think it's a healthy thing. We have this wall of worry. We can't build that much supply. And I would say if I look at every company, what did they report on their earnings calls? Google was token constrained. They said if we add more tokens, we'd be able to generate more revenue. Same for Amazon, same for Microsoft. Same from OpenAI. Same from Anthropic. The world demands more intelligence. Intelligence can only be produced with tokens. And we have physical limits to the amount of tokens we're going to be able to bring online. So, yes, we will have these waves, but I think the rate, the parabolic rate at which these new models are going to produce intelligence, I think we're going to be blown away over the course of next nine months. You talk independently, you know, to Michael True and the guys at Cursor and now, you know, taking over X, or you talk to the guys at Anthropic are open AI and they kind of look you in the eyes with that Oppenheimer look, and they're like, we're here. Yeah, right. Like, we're like, we are going to think about this. OpenAI and Anthropic combined to start the year, had 3 gigawatts of compute, 3 combined. They're going to end the year closer to 10 and next year closer to 20. Yeah, we're making algorithmic improvements. We're making massive steps up the scaling law because the amount of compute we're going to have available to us that think about, you know, macro hard and macro harder that Cursor is going to now be able to train a frontier level model on. So we've got incredible competition in America. We got the right amount of compute coming along. I don't worry about the bubble as much, even though I know that, you know, there will invariably be, you know, some months that revenue doesn't grow as fast. I'm really worried about making sure that America stays foot on the accelerator, competing globally and winning the AI race like this is going to lead to a moment of, of. Of abundance for our economy. And it's only through great national wealth that we can raise the floor for everybody else.
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A
Yeah, no, that makes no sense.
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C
There was some reporting this week that Matter is hiring fd. I was sort of surprised to see them going into the enterprise because it feels like they have every advantage on, you know, consumer. They have the billions of users they have, they have exciting hardware, all these things. How much did you. Was that surprising to you at all? Do you expect more companies that weren't traditionally enterprise focused to say, hey, there's tens, maybe hundreds of billions of dollars of revenue here. We should be in this market.
- [22:13]
B
I mean, the second you start spending $100 billion on CapEx annually, okay, you run into the AWS problem. What's the AWS problem? Now? I have all this compute, but I don't use it every day equally, right? Jeff built AWS because he said I have to build my capacity for Christmas Day or, you know, the week leading up to Christmas, Black Friday. But he's like the rest of the year, half of that stuff sitting idle. It's expensive as hell, so I may as well rent it to everybody else, right? Turned into, you know, a blockbuster business. But it made his core business better because he could. He could build to Black Friday, right? And nobody else could because they didn't have aws. So that's why Elon has launched ews, right? Elon Web Services, you know, with his compute, and, you know, signed up a big first customer with Anthropic. Listen, nobody on Earth is better at turning electrons into tokens than Elon, right? So expect a lot more data centers out of Elon. Expect them on Earth and eventually in space. And I think that changed the whole tenor of the SpaceX IPO, both the cursor deal and the anthropic deal. I think that went from, you know, people being slightly concerned about it to people being quite excited about. I'm happy to, you know, to unpack that. So I think that for Metta, if they're going to be in the game of spending that much money. Listen, Susan Lee is, you know, incredible over there as the cfo, and I'm sure they're looking at the strategic plan and Marcus saying, I want to build even more because that guy is never going to give up the race, right? The frontier level. I. None of these guys want to give up that race. And so they just have to figure out ways to monetize everything that they're building. Do I worry as a shareholder at some level that it's, you know, that's hard, that's hard to take a business, it's been 120% consumer and say, okay, now we're going to be in the business of us and maybe even in the business of enterprise level agents. I think it is hard. I think they're up for the call. And remember you suggested the merger between, you know, product led growth, these coding agents kind of feel like consumer adoption. So there's a lot of shared consumer DNA with what's going on in the enterprise today. So they may surprise some folks, but
- [24:26]
A
and does have links to like hundreds of thousands of businesses through the ads platform. So it's not like they don't have any relationship to businesses. They do.
- [24:34]
C
So one more that I was curious to get your thoughts on. Kirkland and Ellis is talking about investing half a billion dollars into their own software to help run their firm. A lot of people pushing back on that. Historically you take a firm that doesn't have strong software competency and they spend hundreds of millions of dollars on their own software. There's a lot of examples where that hasn't gone well yet. At the same time, software making software today is wildly different and it's very possible that things are changing, especially if you can get the right partners around and I know they have some great partners. Do you expect more companies of that scale, services businesses to want to try to own as much of the stack as possible and not be reliant on the Harveys or the Lagos of the world?
- [25:26]
B
I mean, what else are they going to do? I mean it's kind of like what else are you going to announce? Oh, just we give up and like they got to do something. The competition is coming straight. Adam, I don't think it's a high probability bet personally. Like if I was a partner at Kirkland and Ellis and somebody pitched me on that, I say I'm not sure that's the highest and best outcome here. So what is an alternative outcome? Good friend, you know Josh Kushner, what he's doing at Thrive holdings, right, where he's buying accounting companies. And now I have somebody who's just like deep in the weeds recruiting the best engineers in the world. Deep partnership with OpenAI. I saw Greg Brockman retweet the great the work that they're, that they're benefiting all these accounting firms. Like they're driving Just huge productivity gains in these accounting firms. So it seems to me that that's a more likely outcome. You know, a Thrive holdings buying a Kirkland and Ellis and saying, now we're going to, you know, take this thing and I turbocharged it. I think you're going to see a lot of that out of private equity firms. Out of firms like Thrive Holdings. I think you're going to see take privates where people do that on an individual company basis. But am I confident that software has gotten so easy that a law firm that gets up every day and thinks about writing legal briefs is all of a sudden going to write killer legal software to compete with OpenAI and Anthropic? I think that's unlikely.
- [26:48]
C
What, what is your thinking around the Series A, B, C, these, you know, earlier growth rounds? Feels like a lot of investors are just kind of frozen. They, you know, you were talking earlier about not necessarily frozen in terms of their activity. They're doing a lot of deals, but they maybe don't have as much confidence knowing what will get steamrolled in the future. You were talking about being in the token flow. Is that like where you feel comfortable deploying at this early stage where, you know, you're betting on it, you know, a 10 year.
- [27:25]
B
Yeah, I mean, listen, I think we all have to have the humility in these moments to know that looking out 10 years is almost impossible. Looking out 10 months is pretty damn hard. But I would say if you just looked across our portfolio and I think Altimeter is performing better than it has any time in its 18 year history. You know, our early stage team, I
- [27:44]
A
think overnight success,
- [27:48]
B
awesome, you know, awesome work on the early stage side. But if you look at the type of stuff that we're investing in, it is in the token flow. Right. We're building to those compute shortages. You know, we had the Cerebras ipo, you know, last week. We had been in that for nine years. You know, investors, you know, Grok. So we're looking at a lot of other semiconductor type businesses, we're looking at a lot of compute data center type businesses. And you know, you just had, you know, your prior guests, you guys were talking about all the stuff you're doing in military modernization and the stuff that's adjacent to AI, but benefiting from AI, we're doing a bunch of stuff there and modernization of the military. So I think you find places that are either in the token flow or benefiting from the token flow. And then I would say in growth, like we're just not Doing a lot in what I would call inflection stage growth. This is the companies at 5, 10, 15 billion. You know, we've really made massive bets, the biggest bets in the history of Altimeter between Open Air and Anthropic, which you know is consuming billions of billions of dollars. And so we think they are the principal beneficiaries. And then on the public side, for three years now, we basically had 100% of the portfolio in AI and compute. And you know, as I sit here today, even though it's come up a lot, you know, Hynix is still trading at a single digit multiple and Microns trading single digit multiple and Nvidia's trading at 13 times. And you say, how is that even possible? Nvidia's up 15x like better than a venture market return over three years. Like, like think about that. Like all the venture returns have been had in the public markets.
- [29:23]
A
By the way, the earnings have come and it's not.
- [29:25]
B
But their multiples have come down. Yeah, because the earnings multiples have actually come down. This is the cheapest multiple Nvidia has traded at in a decade right now. Okay. And by the way, I think their growth is going to continue to sustain. They're now taking 50% of their free cash flow and returning it by way of dividend or buying back stock. I would encourage Jensen to do 70 or 75%. I think if he does that, by the way, a prediction, you know, look who invested in Apple the second they bought back or the second they committed to 50%, 75% of free cash flow returning to investors. Warren Buffett.
- [30:01]
A
Yeah.
- [30:02]
B
One of the greatest investment returns in history. Right. And so once you make that cross that threshold and I think this, you know, they're running that business incredibly well. So the public markets we've had, you know, basically 100% AI and compute. We're basically there, you know, today. So I think it is harder if you're a series B or series C company. Think about what we used to do in software. If it's series A, you had a couple million in revenue and then series B, I don't know, you had 20 million in revenue. Shit, you would have a line out the door of people who wanted to do that deal. You wouldn't have a single taker today. Not a single taker.
- [30:37]
A
You mentioned something I think that resonates with everyone. It's very hard to predict what's going to happen in 10 years. Obviously your job is to, you know,
- [30:45]
C
except for you as the reverse names,
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A
but I Want to know about the Trump accounts, and I want to know about investing for the next generation for children. Advice also get me up to speed on the program. What's rolling out, what's the progress. But then what is advice to parents in an uncertain time where setting their children up for success is maybe more critical than ever?
- [31:10]
B
Well, the update is that after four years of working on this and getting it passed into law last July 4, the Invest America act as part of the Big beautiful bill, you know, it's set to launch and be funded on this July 4th. But we launched the app guys yesterday, so you can download the app. Every single family, you should tell every family, you know, as a kid they should download the app for their kids, get their kids signed up. There are 35 million kids in America under the age of 10 who get at least 250 bucks.
- [31:45]
A
Yeah.
- [31:46]
B
So if you're basically born after January 1, 2025, so think about, like, under two, you get 1,000 bucks in the S&P 500. If you're between two and 10, you get 250 bucks. Most of those kids will get 250 bucks from Michael and Susan Dell. If you live in Indiana, you'll get an extra 250 from me. If you live in Connecticut, you'll get an extra 250 from Ray Dalio. If you live in Oklahoma, you'll get 250 from the state of Oklahoma. Okay. And that's just for starters. We have thousands and thousands of companies.
- [32:12]
C
There's a lot of billionaires in states that you didn't name. They've heard from you. I'm sure if they haven't heard from you, they're going to.
- [32:22]
B
It's coming. And by the way, the generosity. This is The Giving Pledge 2.0.
- [32:26]
A
Yeah.
- [32:27]
B
We have trillions and trillions of dollars that are going to change hands in this country. This is the single most efficient way for somebody like me to fund the next generation. 100 cents on the dollar goes to the kid. IT compounds for 18 years for their lifetime. It makes them a capitalist and owner. We know they're more likely to graduate from high school and college, more likely to start a business, more likely to buy a home. The societal ROI on this is off the charts. So we launched it yesterday. Get a rip of this, man. It is now the number three app in the United States. The number three app. We just passed Google. We're only behind ChatGPT and Quad. It's incredible.
- [33:06]
C
Your other two, you're coming for your kids.
- [33:08]
A
I love that. Is in all three of the top app store apps right now.
- [33:12]
C
Total Gerstner. Total Gerster victory.
- [33:15]
A
It's a total Gerstner victory.
- [33:17]
B
Well, I would say, you know, kudos to Vlad and the guys at Robinhood and BNY and Joe Gabbia at the National Design Studio and frankly the whole team at the Treasury Department led by Luke Pettit and the Treasury Secretary. This is the way government should be done. A citizen had an idea, he was able to go to Washington and actually get a law passed. And then we put together a SWAT team of people who are experienced building these things to build them. And then the consumers, that is the citizens of America who pay for this shit, said, hey, we love that thing and bid it up on the App Store. So we have a lot of people downloading the apps. There are a lot of improvements coming, so be patient with us. But download the app, get you get your kid on the path to compounding. On July 4th, guys, the money turns on. So every parent is going to see that their kid owns a little Nvidia, a little Microsoft, a little Walmart. Right. Their little slice of all the top 500 companies in America. And on July 6, I hope we have a joint bell ringing of the New York Stock Exchange and the NASDAQ from the Oval Office to really signify the start of the trading of these accounts. Of course, parents don't have to know anything about investing. It all goes into the s and P500. Yeah, okay, but I'm cajoling some of our friends. You would know their names. I think it would be amazing if we had some of our friends gift a share of the most amazing companies in America. You know, the Facebook, the Space X is the open eyes. How about if they all gave just a share of those companies to every kid in America?
- [34:49]
A
Yeah.
- [34:50]
B
Being like we are going to change and reorient how the 70% of people who have felt left out and left behind, they are not owners of capital. Okay. We need to get them on the compounding journey. They need to feel like they're on Team America. They're in the game. This does that for every child. This is not a 529 account for the top 10% of Americans who can afford to save. This is for everybody. And it's so gratifying. I was in Durham last Friday. I adopted a school there. 700 kids. $250 to every one of the kids. Now a lot of people say, well, how'd you do that? Well, it's $250 times 700 kids, they made a Google spreadsheet. They got them all signed up. I give the principal $150,000 and she QR codes the money and teaches the accounts. Okay, everybody in America can adopt a school, raise a little bit of money, go to your principal and say, we want to juice up these accounts for all the kids. Get all the kids signed up and the teachers there. This was a school that 75% black and Latino, serving the rural poor in Durham. The level of excitement. A mom came up to me crying. I never thought my kids would, you know, own anything. The teacher's so excited to teach the kids about what it means to own something. I grew up in rural Indiana. We had zero. And as I said to the President, when you're at zero, it's a despondent place to be. You don't know how to get to 1. The hardest move in the world is going from 0 to 1. 1 to 2 is easier and 2 to 3 is easier. Yet we're going to get all of these kids from zero to one on this compounding journey. If you start with 1,000 bucks and you say $50 a month, it's $50,000 at age 18, there's no reason we can't put every kid in America on that journey. And to celebrate our second 250 years, right, we're launching a natural. We're going to launch this as a dividend for every kid in America. So I want to make sure that they all sign up starting in 2027. The 3.7 million kids born in 2027, it will be automatic. Get your Social Security number, you get a Trump account, and then we just need to get every small. We're giving money to the. We have 80 kids, you know, to our, you know, roughly 35 employees. They're all going to get 500 bucks at the end of the year into their Trump accounts. I'm just going to QR the money by my team into their accounts. You guys should do it for all the companies you're involved in and really spread the word. Small, medium, large business, realtors, restaurants, everybody can do this. And so we've created an open source platform of universal private ownership where the families have the title and they have the dignity, the dignity of savings. A 401k for life for every single American citizen. I think it's a game changer for the country.
- [37:37]
A
Yeah.
- [37:38]
C
You did it.
- [37:38]
A
You did it. It was fantastic.
- [37:40]
B
Did it?
- [37:42]
A
No, I remember you, you, you talking about this. And, and, you know, as, as, as much respect as I have for you. I put it in the, in the it's too hard bucket. You know, I put it in the, like, this is a thing that is just too hard for anyone, even, even the best. And fortunately it was not, which is fantastic to see. It's the ultimate white pill. So thank you.
- [38:05]
C
That's amazing.
- [38:05]
B
It's a, we're, you know, it's still day one, but, you know, we're off to a good start here. And you know, I think in the fullness of time, as the president said, we estimate over 15 years it could transfer 3 to $4 trillion of wealth from people who have it to the people who would otherwise have zero.
- [38:21]
A
Yeah.
- [38:22]
B
And you know, the president said he thinks it's going to be his biggest legacy. To me, I think it'll be more impactful in the fullness of time than Social Security. Because the difference is you actually own this.
- [38:34]
A
Yep.
- [38:35]
B
You actually own. It's not a government program.
- [38:37]
C
Yeah, yeah.
- [38:37]
B
This is a private account and private ownership that can compound through your life
- [38:41]
A
and you, and you have to imagine that, you know, if you get to that place where, you know, there's, there's a whole new generation that's, you know, becoming an adult, starting a family with 50, 100, $200,000, that's a down payment on a house all of a sudden that can underwrite more building of houses because there's more buyers in the market. There's, there's a whole bunch of market forces that I think will knock on from this in 20 years that could be incredibly positive. So I'm extremely excited about it.
- [39:08]
B
Indeed, no doubt about it. It's a, you know, you're going to, you're going to hear a lot of, a lot out of us over the course of the next several months. But it's, you know, listen, I also should mention I've got the best partner in the world on this. You know, Michael Dell joined me, he and Susan joined me on, on, on this journey. Really helped me over to get it over the last 1 inch line with the administration and then made the biggest philanthropic gift in history. 6.25 billion $250 to 25 million kids.
- [39:38]
C
Yeah.
- [39:39]
B
And you know, frankly, I think for Michael and Susan, they're just getting, I think their example that they've set for everybody else. You know, if you have, if you guys look at the amount of wealth that's being created here in Silicon Valley, I mean, it's really, there is no historical precedent. There is no historical precedent. And the fact of the matter, our charities are not prepared or equipped to take 10, 20, $50 billion. And a lot of people want to give away this money during their lifetime or, you know, within 10 years of
- [40:11]
C
dying and target and targeted.
- [40:14]
B
Right. And in a way, in a way
- [40:16]
C
that there's no up or down. It's like you can do the whole state, you can do your county, you could do school.
- [40:24]
A
Yeah.
- [40:24]
B
And there's not 30% overhead on the charity where somebody's getting paid $10 million. And you know, all this stuff happens after you pass away. 100% of it goes directly to the kid.
- [40:34]
A
Yeah. Charity was so vague for so long, it was like, great, okay, you gave away half your money, but you're actually not transferring until you die. And then it's going to go into this char that we'll deploy it later. It gets so abstract that I think people, all of those big donations that happened in like the previous era sort of fell on deaf ears and they weren't, didn't feel like they were moving the needle. And so this is just an entirely new way to do it. I love it.
- [40:56]
C
The chat is asking if you have any surf trips planned.
- [41:00]
B
Wow, I wonder who that must be. Checking out my Twitter picture, which by the way was at the surf ranch with Raimondo. And the picture, actually some people think it's me. It's not me. That was my then 11 year old son getting barreled at the surf ranch because like telling him how to get into the barrel.
- [41:21]
A
That's awesome.
- [41:22]
B
But I have to say, I'm 55 guys. I just had a birthday. I'm working harder than working hard.
- [41:31]
C
I feel like, I just can't imagine you being like, yeah, now's a good time to take a surf trip. I feel like maybe a trip to surf ranch, but we gotta stay locked in.
- [41:40]
B
There's a lot of work we ought to get. We ought to get together and do that. By the way, I'm currently signing up somebody who's going to adopt all the kids in Los Angeles. We've got San Francisco already covered, we've got Oakland already covered. And we're going to announce some big things here in the state of California. I'm not giving up on California. Yeah, right. We're going to defeat, we're going to defeat the unconstitutional taking tax.
- [42:03]
A
Yeah.
- [42:03]
B
Some people call the wealth tax or the billionaire tax. Like this attack on success, you know, trying to divide wedges, drive wedges between Americans. We're uniting people with the Trump accounts, with the investments. We're raising the floor and getting everybody into the game and this whole idea that we're going to demonize success and drive Elon out of the state, et cetera. Shout out, by the way, to my junior son, Lincoln Gerstner, who published his first paper this week. And I show up at home, and it's on the economic impact of tax policy in California. I show up at home and he said, hey, Dad, I finally posted that paper I was writing. He's doing it with Josh Rowe, the incredible professor over at Stanford. And then he says to me, he's like, has Marc Andreessen ever retweeted you? I said, no, I don't think so. And he goes, I think he retweeted me. And I was like, no, he definitely didn't retweet you. But Mark did. So shout out to Mark.
- [43:04]
A
That's awesome.
- [43:05]
B
And that's, you know, I think that we are. What people. There's a lot of despondency in California. I'm going to take a contrarian position here. Spencer Pratt's gonna be the new mayor of Los Angeles. The wealth tax will be defeated. We will pass the Retirement and Personal Asset Protection act as a referendum in California, which will prohibit people from stealing your retirement money or your personal assets. That will get passed. Okay. That will send a shocking message to the rest of America. The rest of America thinks that California is as blue as it gets. It turns out California is pretty purple, Right? And I think that common sense initiatives are going to, you know, reassert themselves in, you know, in the election in November. And I think it's great because we're the fourth largest economy in the world. I know some of my friends moved out and said, listen, California's got it coming to them. My own view is this. As California goes, so goes the country. We cannot seed California. It is where we're going to battle for the best ideas that are consistent with the founding of the country. And we're going to, you know, win on those ideas. And so I think we're seeing a lot of progress. Shout out to Sergey and building Better California and the incredible work that they did to get us moving in the right direction.
- [44:22]
A
It's fantastic.
- [44:23]
C
Well, great stuff.
- [44:24]
A
We kept you way too long. Thank you so much.
- [44:27]
C
And hanging out and excited for your next project.
- [44:29]
A
Yeah.
- [44:31]
B
How much did you sell this for?
- [44:34]
C
Let's go for it. Let's go for it. Let's go for a serve. Yeah.
- [44:37]
A
We can only say far away from the microphone.
- [44:39]
B
I'm going to turn this into a little BG2 and turn the tables on, you guys. I need to get some. Some more the other way. Great to see you. Have a great week.
- [44:45]
C
Great to see you, Brad.
- [44:46]
A
Thank you.
- [44:46]
C
You're the man.
- [44:47]
A
We'll see you.
- [44:47]
C
Cheers.